Case for keeping workers
from The Star Online: Columnists
Raising the retirement age will help solve serious social problems and enable society to gain from some of the most experienced and skilled people around.
THE CEO of the Employees Provident Fund (EPF) Tan Sri Azlan Zainol wishes that Budget 2012 will extend the retirement period for everyone to 60.
The current retirement age for the government sector is 58 but the private sector, which thinks it is more progressive than the government but is often not, has a retirement age of a mere 55.
Why does Azlan want this extension? Here’s what he said at a conference on Monday: “A factor that works against the adequacy of retirement savings in Malaysia is the increasingly long retirement period.
“When it was first set up in 1951, the full withdrawal age for our members of 55 was the same as the Malaysian life expectancy then.
“But some 50 years on, while the full withdrawal age has not changed, the average life expectancy of Malaysians has increased to 75 years.
“Thus Malaysians today need to save for a 20-year retirement span compared to a shorter period 60 years ago. This is a long period, and one of the longest in Asean and the world.”
Let’s reflect upon that.
In 1951, the average person did not have to think of providing himself with a means to live after he retires because on average he would be dead by the time he retired.
Those fortunate enough to live longer mostly could rely on their EPF withdrawals to tide them through the remainder of their lives.
Sixty years later, they still retired at the same age but their life expectancy had been extended by 20 years. They not only have to fend for themselves on average for another 20 years, they probably still have to take care of at least some dependents.
The social problem is that perfectly capable people are thrown out of work in the prime of their lives, leaving them without a proper means of income to take care of themselves and their families.
Alternative jobs often see them earning a lot less on reduced benefits, even if they do exactly the same work or more, as unscrupulous employers take advantage of their situation to employ or re-employ them at much lower than market rates and reduced benefits.
For illustration, let us consider a young family which has one parent working. The guy gets married in his early 30s and has his first child at the age of 35 and the second at the age of 40.
When he retires at 55, his two children will be 20 and 15 respectively.
If the eldest child is studying, then he will have to provide extra money for further education. Three years later, he will have to do the same for his second child.
Unless he has obtained decent employment post-retirement, an avenue not open to the vast majority of the population, he is already in dire trouble.
As the sole breadwinner, not much would be available as family savings – he would be lucky if he has a roof over his head to call his own.
At the same time, there is increased demand for money from his children who need to be educated and there is nowhere to go for this since he is already retired.
This is the time that many parents pawn their jewellery, mortgage their houses, and downsize their spending drastically for the sake of their children.
If he is lucky, he manages to educate his children. But soon he becomes a burden to them because he has no income, no savings and no assets. He will have to rely on the charity of his children to survive.
If fate decrees something worse, if the sole breadwinner is from the low-income group, then there is no savings, no house, nothing to speak of at retirement. Some get kicked out of quarters provided by employers with nowhere to go.
It is a descent to despair from which it is impossible for the person and his family to rise out of. The street soon becomes home.
Almost any alternative job he takes will not come close to what he used to earn after many years of service.
His former job was so easily replaced with his employer very keen to cut costs by employing younger and, often these days, imported labour.
This is a serious social and structural issue to which the only solution is to extend the working period of everyone according to the increase in life expectancy.
Life expectancy jumped 20 years but retirement age stood at 55 – clearly an untenable situation.
At a time when other nations are looking to increase retirement age to 70 and beyond and in practice some do not have a retirement age if an employee is fit enough to work, we are now only in the preliminary stages of raising the retirement age to 60.
Part of the reason was fierce opposition from private sector employers to this move, the reason being that catch-all reason – keeping costs down.
For employers who stubbornly resist the increase in retirement age, I have these questions to ask: “Wouldn’t your staff shortage woes be alleviated by retaining those reaching retirement age? Is your attempt to cut costs by letting your older staff retire backfiring on you?”
Employers like to employ people who are younger and imported workers because they cost far less.
Many Malaysian employers complain endlessly that they can’t get workers but often they can’t get them because they don’t pay them enough.
The experience of developed countries shows that even with more expensive labour and more equitable wages, it is still possible to produce at lower cost many manufactured goods and services.
A Mercedes Benz is still cheaper to produce in Germany than here because of greater efficiency and larger scale.
Raising the retirement age will have more experienced people in the workforce, help increase productivity and therefore contribute to higher incomes without stressing the economy.
The Government should realise that and push through higher retirement ages.
Sixty is still too young to retire, and the authorities should look towards increasing this to 65 very quickly. If judges and ministers can work at 60 and beyond, why can’t the rest of us?
■ Managing editor P Gunasegaram considers himself fortunate to be working after 55.
PANAS : "ASTAFIRRULLAHHALAZIM" - TARAF ANWAR SAMA SEPERTI SAIDINA UMAR AL-KAHTTAB....
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Menjawab persoalan yang diajukan, Timbalan Menteri Pelajaran Datuk Dr Mohd Puad Zarkashi berkata, beliau pernah mendengar pengakuan itu daripada Datuk Seri Anwar Ibrahim sendiri berhubung perkara itu.
"Tentang Memali, ketika saya sedang menuntut di Amerika, Datuk Seri Anwar Ibrahim adalah menteri pelajaran ketika itu. Saya pengerusi (sebuah) forum...
"Dia (Anwar) mengatakan Ibrahim Libya adalah seorang penderhaka, Ibrahim Libya adalah individu yang mencetuskan suasana yang boleh menimbulkan huru hara, ketegangan politik," katanya. - MalaysiaKini.
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